Aug. 8 (Bloomberg) -- Oil in New York fell for the first
time in four days after a government report showed fuel demand
weakened last week and on concern that the Federal Reserve won’t
enact additional stimulus measures.

Prices declined 0.3 percent as the Department of Energy
said U.S. petroleum demand decreased for the first time in four
weeks. The report also showed oil supplies dropped less than in
an American Petroleum Institute report yesterday. Dallas Fed
President Richard Fisher said central banks may not have the
capacity to undertake more programs to spur economic growth.

“The DOE report is kind of anticlimactic and the market is
a bit disappointed,” said Phil Flynn, senior market analyst at
Price Futures Group in Chicago. “The market is now focusing on
the economy and it’s nervous about what the Fed is going to
do.”

Crude for September delivery fell 32 cents to settle at
$93.35 a barrel on the New York Mercantile Exchange after
increasing to $94.72, the highest intraday level since May 15.
Prices have fallen 5.5 percent this year.

Brent oil for September settlement rose 14 cents to end the
session at $112.14 on the London-based ICE Futures Europe
exchange.

Total products supplied, a measure of fuel consumption,
dropped 204,000 barrels a day to 18.9 million last week, the
first decline since the week ended July 6.

“Market momentum has shifted a little bit after the
inventory report,” said Rich Ilczyszyn, chief market strategist
and founder of Iitrader.com in Chicago. “People started to just
cut and run.”

U.S. Supply

Supplies at Cushing, Oklahoma, the delivery point for Nymex
futures, decreased 1.8 percent to 44.3 million barrels.
Inventories at the Midcontinent pipeline hub have dropped 7
percent since June.

“The futures market tends to look at the latest number and
see how that correlates with prior numbers,” said Marshall
Berol, co-portfolio manager of the Encompass Fund in San
Francisco, which has about $300 million in assets.

Oil futures gained 3.6 percent in July, the biggest monthly
advance since February, on speculation that central banks in the
U.S. and Europe will announce stimulus measures to boost
economic growth, raising oil demand.

Economic Stimulus

Fisher said in an interview today on “Bloomberg
Surveillance” with Tom Keene that adequate economic stimulus
already is in place.

“We’re at the risk of overburdening the central banks,”
he said. “We keep applying what I call monetary Ritalin to the
system. We all know there’s a risk of over-prescribing.”

Ritalin is a drug used to treat depression and
hyperactivity in children.

Fed Chairman Ben S. Bernanke said July 17 that policy
makers were studying options for further stimulus. The Fed
refrained from announcing steps at a meeting last week.

Oil also declined as a report showed German exports fell
more than forecast in June and the euro decreased against the
dollar. The European currency dropped as much as 0.6 percent to
$1.2327. A weaker euro and stronger dollar reduce oil’s appeal
as an investment alternative.

“Concerns about the European economy are dominating the
market,” said Michael Lynch, president of Strategic Energy &
Economic Research in Winchester, Massachusetts.

Middle East

Prices rose earlier on concern that tension in the Middle
East will disrupt global supplies.

Syria’s former Prime Minister Riad Hijab, the most senior
defector from President Bashar al-Assad’s administration,
arrived in Jordan as rebels said government forces had begun a
ground assault against a key Aleppo district.

In Egypt, the army began a campaign to purge north Sinai of
militants, with attack helicopters killing a reported 20
fighters, as President Mohamed Mursi fired his intelligence
chief and a regional governor. Sinai is an Egyptian peninsula
between the Suez Canal and the Israel border.

Total petroleum transit volume through the canal in 2010
was about 2 million barrels a day, according to the Energy
Department. The Middle East was responsible for 33 percent of
global oil production last year and held 79 percent of proved
reserves, according to BP Plc’s Statistical Review of World
Energy, released in June.

Electronic trading volume on the Nymex was 534,233
contracts as of 2:49 p.m. in New York. Volume totaled 651,093
contracts yesterday, 18 percent above the three-month average.
Open interest was 1.45 million.